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Clinton Years - NO Surplus!
So, this link takes you to an article from townhallfinance.com, which has data direct from the U.S. Treasury's website.
This article and the data it is based on do not report Clinton's administration left a surplus.
This is a common misconception propagated by current politicans and mainstream media. Also, I thought this too until I did more digging after watching that YouTube video I keep talking about. Mike Maloney Debt Collapse 2012.
Also, for more info about his topic try Googling " true surplus in Clinton years"
A snippet:
"So why do they say he had a surplus?
As is usually the case in claims such as this, it has to do with Washington doublespeak and political smoke and mirrors.
Understanding what happened requires understanding two concepts of what makes up the national debt. The national debt is made up of public debt and intragovernmental holdings. The public debt is debt held by the public, normally including things such as treasury bills, savings bonds, and other instruments the public can purchase from the government. Intragovernmental holdings, on the other hand, is when the government borrows money from itself--mostly borrowing money from social security.
Looking at the makeup of the national debt and the claimed surpluses for the last 4 Clinton fiscal years, we have the following table:
| Fiscal Year |
End Date |
Claimed Surplus |
Public Debt |
Intra-gov Holdings |
Total National Debt |
| FY1997 | 09/30/1997 | $3.789667T | $1.623478T | $5.413146T | |
| FY1998 | 09/30/1998 | $69.2B | $3.733864T  $55.8B |
$1.792328T  $168.9B |
$5.526193T $113B |
| FY1999 | 09/30/1999 | $122.7B | $3.636104T $97.8B |
$2.020166T $227.8B |
$5.656270T $130.1B |
| FY2000 | 09/29/2000 | $230.0B | $3.405303T $230.8B |
$2.268874T $248.7B |
$5.674178T $17.9B |
| FY2001 | 09/28/2001 | $3.339310T $66.0B |
$2.468153T $199.3B |
$5.807463T $133.3B |
Notice that while the public debt went down in each of those four years, the intragovernmental holdings went up each year by a far greater amount--and, in turn, the total national debt (which is public debt + intragovernmental holdings) went up. Therein lies the discrepancy.
When it is claimed that Clinton paid down the national debt, that is patently false--as can be seen, the national debt went up every single year. What Clinton did do was pay down the publicdebt--notice that the claimed surplus is relatively close to the decrease in the public debt for those years. But he paid down the public debt by borrowing far more money in the form of intragovernmental holdings (mostly Social Security).
The following quote from an article at CBS confirms my explanation of the Myth of the Clinton Surplus, and the entire article essentially substantiates what I wrote."
Re: Clinton Years - NO Surplus!
Another snippet:
"The only debt that matters is the total national debt. You can have a surplus and a debt at the same time, but you can't have a surplus if the amount of debt is going up each year. And the national debt went up every single year under Clinton. Had Clinton really had a surplus the national debt would have gone down. It didn't go down precisely because Clinton had a deficit every single year. The U.S. Treasury's historical record of the national debt verifies this.
A balanced budget or a budget surplus is a great thing, but it's only relevant if the budget surplus turns into a real surplus at the end of the fiscal year. In Clinton's case, it never did."
I can't decide if it's worth setting you straight or not. When a person doesn't know the difference between debt and deficit it just almost doesn't seem worth it. ::sigh::
I only have to read one line in your post, " when it is claimed Clinton paid down the national debt...", to know you have cited an unreliable source. Lol.
The deficit is the difference between how much the federal government spends and how much it collects in one year. If the government ?earns? $2 trillion in taxes in one year, but spends $3 trillion, that?s a deficit of $1 trillion. In order to pay for the difference, the government has to borrow money from itself, American citizens, foreign countries, and other sources.
The national debt, on the other hand, is the total amount we owe. Every year that we borrow more money, the debt grows larger.
The difference between the deficit and the debt is especially important because when politicians talk about reducing the deficit, all that really means is that our debt isn?t growing as fast. It does not mean we?re getting out of debt.
So, the national DEBT grew under the Clinton administration, but the question is then, can there have been a budget surplus even if the debt was growing larger? Can you have a budget surplus and a larger debt concurrently?
From the U.S. Government Accountability Office (GAO) http://www.gao.gov/special.pubs/longterm/debt/budgetdebt.html
"How does the budget deficit or surplus relate to federal debt?
When the Congress makes budgetary decisions, it is also indirectly making decisions about the level of debt held by the public. The yearly change in debt held by the public is approximately equal to the budget surplusThe amount by which the government?s revenues exceed outlays in a given period. or deficitThe amount by which the government?s spending exceeds its revenues for a given period, usually a fiscal year.. (sorry about the blue text, it came from the site and I cannot get rid of it) The budget surplus or deficit is the difference between total federal revenue and spending in a given year. When the budget is in deficit, the government borrows from the public. Alternatively, when the budget is in surplus, the government can reduce debt held by the public. Thus, debt held by the public generally represents the total of all cash deficits minus all cash surpluses accumulated over time.
I have a question, then, if the Clinton years had a surplus in the budget, what did they do with the money? Why didn't they use it to pay down the national debt as this site asserts is what happens when a surplus occurs? Where did that surplus go? And, then why did our national debt grow too if there was a surplus?
Can you answer that for me? I don't know.
Let's pretend that the American govt. operates like a typical household and has an income (tax revenue), expenses (budget), and credit card debt (national debt). Lets pretend that every month said family overspends by x amount (budget deficit) and adds to their credit card debt. Then Clinton comes along and gets the family to stop overspending more than they make (budget surplus). They make some payments to the credit card debt, but the interest rates make it so the debt doesn't actually go down even with the payments,
i don't know if actually Clinton made any payments to the debt. But I saw Bush speak before he got the nomination in 2000. He was talking about the surplus, which was 4 billion (or whatever the number was. The number of zeroes doesn't actually matter in my story). Bush told us how he was going to give the surplus back to us and said 500 million for education, 1 billion in tax breaks, etc. by the time he was done he had spent 6 billion. When I pointed this out to my mom, she dismissed it much like in Animal House when John Belushi started talking about Nazis bombing Pearl Harbor.
so in my original example the family had just started to make strides to getting out of debt when their crazy uncle showed up and took all the extra money plus a ton more so his friends could go beat up some kids who threatened his dad (Iraq)
Okay, I didn't realize the question was only the small bottom part of your post. Lol! I could have answered yesterday. Sorry
This is my understanding. Please correct me anyone, if I am wrong.
The Clinton aadministration left a projected budget surplus for Bush's first year. If the budget was followed. It wasn't. From what I understand, Bush took the money projected in the surplus, and sent it back to the citizens. It was such a huuuuge amount when spent in that manner that I used it to buy a watermelon (not really). And then the next 8 years ensued. So much awesomeness (please note my sarcasam).
This is why I laugh so hard at the term fiscal conservatives. Cons always shout out loud and proud that they are the party that understands economics, but SHOW me that in our recent history. Yeah. Not there.
Thanks for responding. So, why did Bush send it back to the citizens instead of paying down the debt? Also, in what form did he send it back to us? I can't remember any etra watermelons in my shopping cart.
If I remember correctly (and again, someone PLEASE speak up if I am wrong!), Bush said something like, "The surplus is not the government's money, it's the people's money!"
I am not saying this directly to you ML, but to the American people in general. I don't understand the short collective memory. I remember this quite well.
Bush decided instead of focusing on growing the surplus, he would enact a 1.3 Trillion dollar tax cut. Yes - TRILLION. Greenspan warned of a recession, but Bush said it would stimulate the economy.
I was not married at the time, so I got the single filer's rebate. I am going to shout this: I GOT A CHECK IN THE MAIL FOR $300. It is strange to me that no one seems to remember the money being pissed away like this. So odd.
If you were a single parent you got $500, and if you were married your fam got $600.
ETA: Again, I would like to be corrected if I am wrong, but I believe ALL filers got this. I'm talking millionaires, billionaires and the rich folk who didn't need it.